Last week, the Connecticut House approved House Bill 5521 (H.B. 5521), which would bar Connecticut employers from using credit reports in their employment decisions such as hiring and firing.
You can download the bill’s text here.
The bill’s main provisions would prohibit employers from asking employees or prospective employee to consent to the creation of a credit report that contains information about that person’s credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment.
There are three exceptions, however. The employer can seek a report if (1) it is substantially related to the employee’s current or potential job, (2) it is required by law, or (3) the employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law.
Of course, the meaning of what "substantially related" is must also be looked at. The statute defines that fphrase to mean information contained in the credit report is related to the position for which the employee or prospective employee who is the subject of the report is being evaluated because the position (A) is a managerial position which involves setting the direction or control of the business, (B) involves access to customers’, employees’ or employer’s personal or financial information other than information customarily provided in a retail transaction, (C) involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, transfer money or enter into contracts, or (D) provides an expense account.
Under the bill’s provisions, employees could complain to the Connecticut Department of Labor if they suspected a violation of the law.
The bill has had several amendments proposed to it and it was not on today’s "go list", so it’s unknown yet whether the measure will actually get voted on in the state senate before the term expires in a few weeks. Until then, employers that use credit reports in their hiring process should continue to play close attention to this and speak out to their state senators about their views of the bill.